If your friend bought a share in a restaurant, and shared with you the list of the best restaurants in the city, would you agree with their recommendations? Or would you take their suggestions with a pinch of salt?
Chances are, you’d do the latter.
But what if you didn’t know your friend owned a share in the restaurant? You wouldn’t know that the restaurant they rank as the Best in Town is their own. Doesn’t it sound wrong of them to hide such a fact while recommending you their services?
A similar thing is going on with Threadgill Financial, an innocent-looking advisory firm in Texas. Their clients probably don’t know if they are getting the best financial returns possible or not.
The shady terms and conditions and the offered services of Threadgill Financial suggest they might be a dangerous company focused on taking the advantage of their clients.
Threadgill Financial: Who are they
Threadgill Financial is a financial planning company based in Woodlands, Texas. They are located at 1610 Woodstead Ct # 194, Spring, TX, 77380, United States.
Registered in 2018, they serve in one state and manage $255.3 million. They provide services to 324 clients with a staff of two people.
When you compare them with other financial planning companies in the region, they have relatively lower experience and staff.
At the time of writing this Threadgill Financial review, they have two people in their firm:
- Zachary Threadgill JD, CFP
- Adam Threadgill JD, CFP
Zachary is a former tax attorney and a Certified Financial Planner. While his website bio doesn’t explain how many years he has actually spent in the industry, it does point that he has spent several years as a financial planner. He focuses on advising his clients on retirement planning.
Adam was a US Marine and was deployed to Fallujah, Iraq. After being discharged from Marine Corps, he completed a degree in Bachelor of Arts and got a Doctorate of Jurisprudence. He is also a Certified Financial Planner.
Both of them work together to run Threadgill Financial. Looking at their resumes, you’d think that they should be able to run a spectacular firm, but their lack of professional experience is clearly visible in their offerings.
That’s because when you compare their offered services with other financial planning firms, you’d notice just how many disadvantages you’ll get by picking them. The next section of my Threadgill Financial review will throw more light on why their services might not be suitable for you.
Why Threadgill Financial is a Bad Choice for You
There are many issues present in the service of Threadgill Financial. The following points will help you understand why I’m constantly reiterating that you shouldn’t do business with this firm.
They offer very high risk Mutual Funds with 12b-1 Fees
When a financial advisor or planner recommends mutual funds that have 12b-1 fees, their intention gets in question.
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Because mutual funds with 12b-1 fees require you to pay higher (thus, a higher expense ratio) in comparison to mutual funds that don’t have such fees. 12b-1 fees is the fees paid out of the ETF or mutual fund assets to cover the costs of marketing and selling the mutual fund shares.
It is among the hidden costs a broker can charge their client, without their knowing. This is why I don’t recommend hiring financial service providers who offer mutual funds with 12b-1 fees.
You might think that if a mutual fund costs you more, it must offer better performance, which would be wrong to assume.
SEC conducted a study on the performance of mutual funds that have 12b-1 fees and those that don’t have such fees. They found no difference between the performance of the two. So, investing in a mutual fund with 12b-1 fees only puts you at a loss as you pay more than you should.
Threadgill Financial recommends its clients to invest in mutual funds with 12b-1 fees, making it difficult to trust them. They might be recommending them due to the prospective financial incentive they can get rather than the financial interests of their clients, which is highly unethical.
They offer Products with Performance-based Fees
When a financial planner offers products with performance-based fees, he or she gets paid when they outperform an index (or a similar benchmark).
On paper, it seems like a fantastic compensation structure. After all, your financial planner would get paid only if they reach a specific goal. But there’s a huge flaw with performance-based compensation.
The Investment Advisers Act for RIAs in 1940 bans most financial advisors from charging performance-based fees because it incentivizes the use of unethical and risky investment strategies, which puts the client at additional risk.
The SEC started allowing RIAs to offer products with performance-based fees only after 1985 with many conditions to ensure they didn’t damage the clients’ interests.
Many experts have researched the returns of performance-based fee products and products without this fee-structure. They found no difference in the returns of both of these products.
Hence, by investing in such products, all you’re doing is facing an additional risk of losing your funds.
Threadgill Financial recommends products with performance-based fees. Investing in such products can cause you to lose all of your funds quickly and you wouldn’t be able to do much about it.
The risk for such investments only increases with time and is highly detrimental particularly during down markets (like the current pandemic-ridden market). However, most clients are unaware of the highly risky nature of these investment products. Because of this, unethical finance professionals might recommend these products and enjoy higher fees while putting the client at unnecessary risk.
They perform Side-by-side Management
Threadgill Financial performs side-by-side management, another practice that’s looked down on in the financial advisory sector.
Side-by-side management means the financial planner manages hedge funds or mutual funds with smaller retail accounts. In such cases, the financial planner gets an incentive to favor the larger fund which causes unequal trading charges and unfavorable trade executions for the retail clients.
They trade Recommended Securities
In Threadgill Financial’s disclosure, they have mentioned that they trade recommended securities.
This means they trade the securities they recommend to their clients. You can understand why it would cause conflicts.
When a financial planner trades particular securities, they can manipulate their returns by recommending you those securities. As a result, you would get dishonest financial recommendations that aren’t focused on your interests.
In other words, your financial planner would be using your money to make money for himself. It’s a highly unethical practice, which is why I don’t recommend hiring any financial planner who trades recommended securities.
It’s possible that Threadgill Financial might be involved in front running. Front running is when your financial planner trades specific securities before you.
In short, they have an incentive to give you flawed financial advice. You wouldn’t even be aware of the profits you are missing out on because of this.
They have a Terrible Advisor-to-Client Ratio
The advisor-to-client ratio at Threadgill Financial is 1:162. This means, one financial planner at this firm advises 162 clients at a time, which is a substantially high number.
When a financial planning firm has such a high advisor-to-client ratio, it makes it very difficult for them to offer personalized advice to their clients.
Suppose you had to advise 100 people on something. Do you think it would be possible to give them highly specific and personalized advice to each one of them?
In such cases, the financial planning firm resorts to giving cookie-cutter advice. Cookie-cutter advice, as the name suggests, is template-based advice financial planners give to their clients.
The problem with cookie-cutter advice is that it doesn’t focus on your issues and goals. Every investor has unique requirements and personal goals they want to achieve. The duty of a financial planner is to offer honest and personalized financial advice to their clients.
Hence, if a financial planner resorts to giving cookie-cutter advice, it is unethical. Because it means the financial planner doesn’t care about the goals and requirements of the clients. You would get mediocre or poor results with cookie-cutter advice than you’d get with personalized, meticulous advice.
For example, you feel heaviness in your chest. Now you can do two things to determine your sickness. You can either google your symptoms and read blog posts or you can call your physician. The former is akin to getting cookie-cutter advice while the latter will help you get personalized advice.
They don’t take responsibility for their service/advice (Important)
Probably the biggest reason why I don’t recommend working with Zach and Adam’s firm is the detailed disclaimer present in the footer of their website. The disclaimer is in small print and most people wouldn’t even notice such a thing:
The disclaimer states “Diversification does not guarantee a profit or protect against loss in a declining market It is a method used to manage investment risk.”
Which seems like a harmless little sentence is actually the Get out of Jail card for the people at this company. You see, if a financial planner gives you wrong advice, you can go to the SEC and file a complaint about this matter.
However, this little disclaimer protects Threadgill Financial from such an event. When you pay them for their service, you automatically agree to this disclaimer, and so, you can’t hold them responsible for the returns on their financial advice.
If you’d raise a dispute with the SEC about their flawed financial advice, their lawyer would inform you of this clause and they would go scot-free. This is a serious issue and it suggests that Zachary and Adam don’t have the right intentions.
They have put such a clause in their terms and conditions because they are well-aware of their offered services. I have already explained why you can’t trust their recommendations, this simple clause ensures that they don’t face any repercussions for causing you financial loss.
What do these Qualities mean for you?
In the previous points of my Threadgill Financial review, I pointed out the serious flaws in this firm’s offered services. You can see that many of their offered services go against the interests of their clients. They have put themselves in a position where they earn more money by giving biased or dishonest financial advice to their clients.
It’s already highly difficult to distinguish good financial advice from bad. In this industry, personalization matters a lot as it ensures that you will get dedicated attention and optimal advice.
But due to the high number of clients and low staff (only two people), Threadgill Financial can’t offer the necessary level of personalization you’d need to get the best financial results.
It’s important to know these things because it helps you determine if you can trust a financial planner or not.
Moreover, when they make money by recommending you specific products, it means they care more about themselves than you, the client, which is a cardinal sin in financial advising.
Threadgill Financial Review 2021: Conclusion
Threadgill Financial seems like an amazing financial planning firm on paper, but their offered services and lack of experience shows that you can’t trust them. The way they have tried to protect themselves from potential disputes by adding a mischievous disclaimer in fine print, indicates they know their clients aren’t getting the best financial advice.
In addition, they only have two people in the firm handling more than 300 clients. This means they don’t have the sufficient manpower to give personalized services to each client. It’s practically impossible so it would be wrong to expect them to as well.
However, it means you will have to take their recommendations with a grain of salt because chances are, they offer cookie-cutter to every customer.
It would be best to find a firm that has more experience, more resources, and more care for its clients’ success.
Avoid Threadgill Financial! They provide high-risk services and have shady disclaimers in place to avoid lawsuits. The service providers lack experience and use deceptive tactics with their clients. It is strongly advised that you go for other experts.
- Very Inexperienced
- Cookie-Cutter Advice
- Deceptive Terms & Conditions
- Very High Risk
After attending one of their seminars, I made an appointment with Zak to review my finances for retirement. As I told him, I am already working with a financial advisor, but wanted a second opinion. He reviewed my information, asked pertinent questions, and determined that my current situation was right on track. He answered my questions and made NO push whatsoever for me to transfer my business to him. He made two excellent suggestions for beneficial actions I might take that neither my accountant nor financial advisor had noticed. His background as a lawyer, estate planner, and financial advisor makes him uniquely qualified to recognize certain actions other professionals less broadly trained might not. I was very impressed with his knowledge, experience, professionalism and honesty.
I have been managing my own retirement accounts for the last 35 years. Before this last year, I had multiple rollover IRA accounts spread out across multiple brokerage firms. Fidelity, Charles Schwab, Morgan Stanley, Stifel, Vanguard and E*Trade.
Not knowing much about investing, other than buying AAPL stock and a few others, I handed one of the accounts over to Morgan Stanley thinking I would follow along and learn something. They immediately sold most of the AAPL stock and invested in other stocks and funds for diversification. They would call before each trade and visit once a year. They moved from MS to Stifel and carried on in much the same way. After years I found the account fees and trading fees ate up a significant amount of the gains.
Meanwhile, for my other accounts, I started following along with Motley Fool subscription recommendations and mostly AAPL stocks. For the most part I did very good along with the general market. Got really lucky with my AAPL investment. The one thing that bothered me with Motley Fool is the constant offering of new subscription services and a buy and hold mentality.
About two years ago, 2019, I started getting serious about retirement and started looking for a retirement advisor not knowing exactly how to go about retirement or knowing if I had enough money to retire.
A good friend went to one of the Threadgill seminars and recommended I take a look at them. I made a spreadsheet comparing retirement services from most all the companies. Most all firms charge a fee based on assets under management, regardless of performance and most advisors are younger inexperienced button pushers following advice from the home office based on risk tolerance. What I liked about Threadgill was the smaller more person advice, the performance based fee and stock trading much like what I have been doing. So I set up a meeting and took along my spreadsheets. Zac reviewed my personal situation and said I did not really need his advice since I had been doing a good job on my own. However I was wanting retirement advice and wanted to retire from worrying daily about the markets. After the first meeting Zac put together my retirement plan and we signed up and transferred about half of our assets over to Threadgill Financial.
The way Threadgill works is very transparent, all funds are held at TD Ameritrade, where you have a login account to monitor the activity. Zac and Adam make no fee block trades against all accounts. The only fee they charge is an annual fixed percentage on returns above 5% gain. They also have other fee structures for smaller accounts, but I liked the performance based structure and if they can grow the account by at least 5% we can live off the returns in retirement.
The other half I have given over to a friend who opened up an EdwardJones office after being laid off from O&G. EdwardJones is a old school investment firm with asset based fees investing in mostly mutual funds and ETFs according to risk tolerance.
I feel more diversified having two firms with different strategies and we will see which one has better results. I also still have a smaller after tax brokerage account where I follow some Motley Fool trading.
It’s easy to make money in an up market, it will be interesting to see which strategy works best in today’s more challenging market environment, and I don’t worry so much anymore with two other helping hands.
Never hire an advisor that gives cookie cutter advice. Those people are literally scammers. They act as if they are giving you valuable investment advice and helping you grow your portfolio. The truth is vastly different however. You get LESS than you would be getting.
When I read about the concept of cookie cutter advice, I reviewed my investments personally and consulted with a few other advisors. That was the best decision of my life. It has been 5 years since I changed advisors and my returns have improved greatly. If Threadgill Financial has so many clients with only a staff of two people, they must be giving generic advice to their clients. Period. My last advisor had this issue too. He managed too many accounts and to do that, he started giving generic investment advice to everyone. Threadgill Financial’s clients are probably getting ripped off without being aware of it. This is just like any other scam.
Most people who hire these high-end financial advisors don’t even know how they are getting ripped off. I’m sure the people who are giving Threadgill 5-star review on Google and Gripeo haven’t reviewed their investments properly. How can two people serve hundreds of clients at once and give them personalised service?
My wife & I have been clients of Zac’s for more than 6 years. He’s very trustworthy & we’ve thoroughly enjoyed working with him. Earlier in his career he worked as a stock broker I believe in the Dallas area. I remember he said he was asked by that broker firm to open an office for them in Houston. He took the challenge and built a lucrative office for that broker. I feel his experience is very good. My retirement account has grown every year at a very acceptable percentage. We feel that we have a personal relationship with Zac which we feel is reciprocated. I would disagree with the message of this article on Threadgill Financial. I would highly recommend their services.
Finance advisors are horribly overrated.
My wife and I have been a client for several years and so have personal experience with Zac Threadgill.
Zac did have investment advising experience before he struck out on his own (I forget who with but he told me who and why he left when we first signed on.
We tried out Zac with a lesser amount performance-based fee for a few years now and found no difference in risk of investment. Since we are now required, he is really pretty conservative with our money keeping a large percentage in cash in troubling times. He takes somewhat more risk with my 30 year old son’s account which is understandable. At least to us (or my son), he has never offered mutual funds that have 12b-1 fees. He doesn’t even invest us in mutual funds.
Unequal trading charges? TD Ameritrade makes the trades free. This is a bogus claim.
We meet twice a year with Zac and get confirmation of all trades. While keeping a lot of our money in cash during troubling times, he does trade.
Advisor-to-client ratio – as I said, he certainly puts my son (who is not in a performance-based fee account) in different stocks with higher returns but ,of course, more risk. So he does take the time to address individually our separate needs. His advice is absolutely not cookie-cutter.
“They don’t take responsibility for their service/advice” – no advisor does. They can’t. This section makes it sound like you don’t know what you are talking about.
My conclusion is that you have either have an axe to grind or something even worse. You really don’t know what you are talking about when it comes to Threadgill Financial.
Thank you for your comments. I’m just reading this review and am/was extremely concerned about my choice of financial planners.
I’ve been managing my own finances seriously for the past decade. I read books and took a small course in personal finance. If there’s one thing I have learned in my years of experience it’s that financial advisers are overrated.
They are quite rich so they spend tons of money on advertising and they make it seem like that you can’t increase your wealth without their help. But the reality cannot be further from the truth.
You just need to read and learn a little, after that just be smart with your money.
You’ll be wasting your money with hidden fees and risking your money with someone who doesn’t have your best interests in mind.
Another great piece GripeO!
Beware of Threadgill Financial. They are allegedly posting fake 5-star reviews on Better Business Bureau or BBB. Not only that, but they are using websites like AccessWire to bury the multiple reports of lawsuits against them.
I’m an internet investigator and I didn’t even know about Threadgill Financial before I saw this post, after doing some research it was clear that the executives at Threadgill are doing something really fishy.
Websites to look out for:
– Accesswire (Accesswire dot com)
– Yahoo Finance (Finance dot Yahoo dot com)
– CRWEWorld (crweworld dot com)
– Better Business Beuro (BBB dot org)
Fake Reviews On BBB:
If you go on the BBB profile of Threadgill Financial, you’ll find some really interesting things to note there. First off, Threadgill Financial is accredited with Better Business Bureau. And a quick Google search will show that BBB is notorious for changing ratings and letting businesses resolve complaints after they get accreditation on their website.
I would strongly advise anyone reading this, to seriously think again if they were planning on collaborating with someone from Threadgill. Such unethical and shady business practices are never a good sign, and you might be in danger of working with a potential scammer.